The Conference Board LEI for Korea declined slightly, after four months of consecutive gains, with only exports making a positive contribution to the index. Despite this month’s decline, the leading economic index grew by 3.0 percent (about a 6.1 percent annual rate) between June and December 2013, a considerable improvement from the contraction of 1.7 percent (about a -3.4 percent annual rate) during the previous six months. Additionally, the strengths among the leading indicators continue to remain more widespread than the weaknesses.

The Conference Board CEI for Korea, a measure of current economic activity, also declined in December. In the second half of 2013, the coincident economic index grew by 1.1 percent (about a 2.2 percent annual rate), more than twice as fast as in the first half of the year. At the same time, real GDP grew at a 3.7 percent annual rate in the last quarter of 2013, down from 4.3 percent growth (annual rate) in the third quarter.

Despite the decline in leading index for Korea, its six-month change has been gradually improving in the last few months and the strengths in the components remain widespread. In addition, the CEI’s six-month growth rate has been relatively steady. Taken together, the behavior of composite indexes and their components continues to suggest that the current rate of economic growth is likely to continue, and there may even be some upside potential in the near term.

LEADING INDICATORS. Only one of the seven components that make up The Conference Board LEI for Korea increased in December. The positive contributor was real exports FOB. Negative contributors – from the largest negative contributor to the smallest – were private construction orders, stock prices, the (inverted) index of inventories to shipments, the (inverted) yield of government public bonds, letter of credit arrivals, and value of machinery orders.

With the 0.2 percent decrease in December, The Conference Board LEI for Korea now stands at 123.3 (2004=100). Based on revised data, this index increased 0.1 percent in November and increased 2.2 percent in October. During the six-month span through December, the leading economic index increased 3.0 percent, with five of the seven components advancing (diffusion index, six-month span equals 71.4 percent).

COINCIDENT INDICATORS. Two of the four components that make up The Conference Board CEI for Korea increased in December. The positive contributors– in order from the largest positive contributor to the smallest – were industrial production and monthly cash earnings*. The wholesale and retail sales component and total employment declined in December.

With the 0.3 percent decrease in December, The Conference Board CEI for Korea now stands at 117.5 (2004=100). Based on revised data, this index increased 0.3 percent in November and increased 0.7 percent in October. During the six-month span through December, the coincident economic index increased 1.1 percent, with two of the four components advancing (diffusion index, six-month span equals 50.0 percent).

DATA AVAILABILITY. The data series used to compute The Conference Board Leading Economic Index® (LEI) and The Conference Board Coincident Economic Index® (CEI) for Korea reported in this release are those available “as of” 3 P.M. (ET) on February 12, 2014.

* The series in the coincident economic index based on The Conference Board’s estimates is monthly cash earnings. There is no forecasted series in the leading economic index.

THESE DATA ARE FOR ANALYSIS PURPOSES ONLY. NOT FOR REDISTRIBUTION, PUBLISHING, DATABASING,
OR PUBLIC POSTING WITHOUT EXPRESS WRITTEN PERMISSION.

Working Papers on The Conference Board Leading Economic Index® for the United States